Innovation and employment growth in industrial clusters: evidence from aeronautical firms in Germany

This article investigates the impact of various agglomeration forces on employment and innovation for a sample of aeronautical cluster firms in Northern Germany and a control group of geographically dispersed aeronautical firms in other German regions. The findings suggest that employment growth is positively affected by labor market pooling but this effect is not cluster‐specific. The firms' probability of innovating is positively influenced by knowledge flows from proximate scientific institutions and public information sources as well as demanding local customers. However, only the effect of demanding customers is cluster‐specific.     

The Role and Current Status of IFRS in the Completion of National Accounting Rules – Evidence from Turkey

Abstract

As it is not a member of the European Union, Turkey has not yet adopted EU accounting directives by law. Instead, Turkish standard setting authority adopted International Financial Reporting Standards for entities that have public accountability and has recently prepared the draft Turkish financial reporting standard for non-publicly accountable entities that are subject to independent audit: Framework for Local Financial Reporting. This national standard is influenced by European accounting directive 2013/34, international financial reporting practices and UK experience in addition to national accounting rules.     

A mechanism design approach to allocating central government funds among regional development agencies

To allocate central government funds among regional development agencies, we look for mechanisms that satisfy three important criteria: efficiency, (individual and coalitional) strategy proofness (a.k.a. dominant strategy incentive compatibility), and fairness. We show that only a uniform mechanism satisfies all three. We also show that all efficient and strategy proof mechanisms must function by assigning budget sets to the agencies and letting them freely choose their optimal bundle. In choosing these budget sets, the agencies’ private information has to be taken into account in a particular way. The only way to additionally satisfy a weak fairness requirement (regions with identical preferences should be treated equally) is to assign all agencies the same budget set, as does the uniform mechanism. Finally and maybe more importantly, we show that the central government should not impose constraints on how much to fund an activity (e.g. by reserving some funds only for a particular activity): otherwise, there are no efficient, strategy proof and fair mechanisms, no matter how small these constraints are.     

FDI activity and worker compensation: evidence from US non-manufacturing industries

This study examines worker compensation effects of FDI activity in US non-manufacturing industry sectors. A clustered standard error correction is used when estimating wage and non-wage compensation equations, with special attention given to FDI’s effect by worker educational attainment and union status. Wage findings reveal an FDI-wage premium for highly educated non-union workers and FDI-union rent erosion for all educational-gender groups excluding females with low educational attainment. Non-wage compensation analysis reveals FDI activity is generally associated with significantly higher probabilities of workers receiving employer financed non-wage compensation for union and non-union workers regardless of their level of educational attainment.     

The role of the physical work environment for creative employees – a case study of digital artists

The purpose of the study was to explore the role of the physical environment for creative employees. The results are based on interviews with office-working digital artists. The physical work environment was considered to offer three types of support for creative work for the participants: functional, psychosocial and inspirational. Creative processes would find better breeding ground if functional support, such as adequate lighting and tools, and psychosocial support, such as spatial possibilities for both privacy and communication, were provided. Without inspirational support, such as brainstorming rooms, dynamic planning and imaginative interior design, the work outcome was believed to become less creative. The physical environmental support model can be used by companies with an interest to provide creativity supportive workplaces.     

Risk propensity within the military: a study of Swedish officers and soldiers

Issues concerning risks in the military have gained increased attention within the Swedish Armed Forces, particularly relating to the new focus on an all voluntary force participating in international missions. Military activities inevitably include an element of calculated risk-taking, while at the same time the unnecessary taking of risks must be minimized. Within the context of the specific mission and situation, a number of factors relating to demographic variables, traits and beliefs may influence individual inclinations towards risk behaviour. The purpose of this study was to examine the relationship between such factors and individual risk propensity. Data were collected from two samples of Swedish soldiers and officers. Examining demographic variables, negative safety values and risk propensity were found to decrease with age, while men demonstrated a more sceptical view of safety measures and a higher risk propensity than women. The trait known as lack of deliberation, reflecting an inability to think ahead and foresee consequences, was positively related to risk propensity. A more sceptical view of safety was shown to be associated with a higher sense of personal invincibility and together with lack of deliberation predicted variations in danger-seeking scores. The distinction between functional and non-functional risk-taking is discussed on the basis of the relationships found in the study. Implications for recruitment to the military as well as for training and leadership are suggested, emphasizing the need for military leaders to balance their leadership in terms of safety-oriented and risk-promoting behaviours.     

EXIT OPTIONS AND DIVIDEND POLICY UNDER LIQUIDITY CONSTRAINTS

We introduce a post‐entry liquidity constraint to the standard model of a firm with serially correlated profitability and an irreversible exit decision. We assume that firms with no cash holdings and negative cash flow must either exit or raise new cash at a transaction cost. This creates a precautionary motive for holding cash, which must be traded off against the liquidity cost of holding cash. We characterize the optimal exit and payout policy. The direct effect of financial frictions is to impose inefficient exit, but there is also an indirect effect through higher equilibrium price that leads to inefficient survival.